China’s property sector is showing signs of improvement, with market confidence gradually recovering, Housing Minister Ni Hong said on Sunday. His comments come as policymakers aim to boost economic optimism in the face of mounting U.S. trade pressures.
After years of decline, the real estate sector has started to stabilize. Property investment plummeted to record lows last year, with sales and new construction falling sharply. However, since January and February, the market has shown positive trends, with declines slowing and signs of recovery emerging, Ni stated at a press conference during China’s annual parliamentary meeting.
While official data for early 2025 will be released on March 17, analysts at Nomura suggest that property sales and prices in China’s largest cities have been performing better than expected. Despite this, a Reuters poll indicates that home prices may continue to fall in 2025, with a full recovery unlikely before 2026.
The sector has faced severe challenges since home prices peaked in August 2021, leading to a 20-30% decline, unfinished projects, developer defaults, and even public protests. With real estate making up about 70% of household wealth and nearly a quarter of China’s economy at its peak, weak property demand has contributed to broader economic concerns.
To support the sector, China will expand financial assistance for “whitelist” housing projects and increase urban village renovations. The government’s 2025 work report, released by Premier Li Qiang, emphasized the need for sustained efforts to stabilize the real estate market and promote the construction of sustainable and high-quality housing.
Signs of stabilization in the property sector could help cushion China’s economy from rising U.S. tariffs, though challenges remain as deflationary pressures and cautious consumer spending persist.
